With the plenitude of responsibilities in the healthcare space, there’s bound to always be a shortage of working capital to shore up everything. Cash flow is of paramount importance, which is medical factoring could be just the thing that you need to benefit your business and place you ahead of the competition.
The Need for Working Capital in Healthcare
Among other things, your offices need to be able to pay rent and all their utilities – these are basic, of course. On top of conventional aspects of business in general, you also need to worry about malpractice insurance, consultants/attorneys with a specialization in the healthcare industry, and of course the sometimes exorbitantly expensive medical equipment and attendant supplies.
This is where medical factoring can come into play to effectively save the day. You will need the capital to parry lawsuits, to combat the inevitable decrease of patients that happens every once in a while, healthcare reforms that ultimately aid the huge corporate hospitals while stifling competition from the smaller ones.
Medical Factoring: Getting Started
The architect of the deal will be a factoring company; particularly one that is dedicated to financing elements in the healthcare community. Before you start the search, make sure you have sent out invoices for payment between one month and three months. You will need this information at the ready when you actually approach the medical factoring company, since they will take a look at your business and the invoices that are out in the field.
The Factoring Terms
Next, you can expect to receive an offer denoting the healthcare company’s advance rate, which will be between 80% and 90% of the total value of your fielded invoices. If you accept, you’ll receive the funds within a few business days. The actual lender (the client is the factoring business in this case) will then shift its attention to the patients for payment.